GBP/USD Today News - The GBP/USD exchange rate rose during the Asian session on Friday, moving away from the one-and-a-half-week low of around 1.2840-1.2835. However, the spot price movement did not show follow-up buying or greater market optimism, and it is currently trading around 1.2880, gaining more than 0.10% on the day.

The US dollar (USD) seems to be consolidating after strengthening overnight to reach a one-week high, and this movement is a significant factor providing some support for the GBP/USD pair. Nevertheless, the decline in the US dollar appears limited after macro data released on Thursday showed optimistic growth. This data indicated strengthening in the US labor market and supports the prospect of further tightening by the Federal Reserve (Fed). However, investors remain skeptical about whether the Fed will commit to a more dovish policy or stick to the forecast of a 50 basis point rate hike by the end of this year.

Consequently, attention will remain focused on the highly anticipated FOMC policy decision scheduled to be announced next Wednesday. Meanwhile, a lower risk sentiment may provide additional support for safe-haven currencies like the US dollar. In contrast, the British pound (GBP) is likely to continue its underwhelming performance, driven by disappointing UK consumer inflation data released this week. This data reduced pressure on the Bank of England (BoE) to aggressively raise interest rates. As a result, traders may be reluctant to take significant positions in appreciating the GBP/USD pair.

From a technical analysis perspective, the spot price shows resilience below the 100-period Simple Moving Average (SMA) on the 4-hour chart and has managed to move back above the 50% Fibonacci retracement level of the price rise from June to July. The GBP/USD pair currently appears to have halted its recent decline from the highest level since April 2022, which was around the 1.3140 area reached last week. However, any further upward movement is likely to encounter strong resistance near the round number of 1.2900 and risks experiencing a rapid decline near the 38.2% Fibonacci retracement level, which is around 1.2930-1.2935.

Considering that the oscillator on the daily chart remains in positive territory, continued strength after the recent movement will indicate that the corrective decline has ended and opens up opportunities for further increases. The GBP/USD currency pair could then gain momentum to reach the psychological level of 1.3000, which aligns with the 23.6% Fibonacci retracement level and should be a key point. Therefore, further buying action would change the short-term trend and support traders with a bullish outlook.

On the other hand, the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently located around 1.2855-1.2850, appears to be the nearest support level. If there is a convincing breakthrough below this level, it is likely to reveal the 61.8% Fibonacci retracement level around 1.2800. If prices drop below this, the GBP/USD pair could accelerate its decline toward the next relevant support around the 1.2750-1.2745 zone, continuing toward the round number of 1.2700 and the area of 1.2685-1.2680.

Warning!

This analysis is based on fundamental and technical views from reliable sources and is not to be construed as advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to guide your trading.

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